Key Takeaways
- Wally Liaw, Super Micro’s co-founder, faces federal charges for allegedly evading US export controls to ship technology to China, sparking renewed investor concern.
- Institutional investors like Tortoise Capital have dumped their entire SMCI holdings, while Zacks Investment Management labels the stock “uninvestable.”
- Shares have collapsed approximately 65% from the July 2024 near-term high of $60.71, with year-to-date losses reaching 27% in 2026.
- The stock currently trades at roughly 7x forward earnings — significantly below its decade-long average of 12x — while Wall Street maintains a neutral “Hold” stance.
- A handful of bullish investors continue holding positions, pointing to SMCI’s critical role in AI server infrastructure and anticipated fiscal 2026 revenues exceeding $40 billion.
Super Micro Computer’s journey has been nothing short of turbulent over the past twelve months. As a leading provider of server systems powering AI data centers, the company occupies a strategic position in the artificial intelligence infrastructure buildout. The firm counts Nvidia among its most important partners, with the chip giant deriving approximately 10% of its total revenue from Super Micro. Despite this advantageous positioning, the company continues to be plagued by controversy.
Super Micro Computer, Inc., SMCI
The most recent setback emerged when federal prosecutors indicted co-founder Yih-Shyan “Wally” Liaw on allegations of illegally circumventing American export controls to facilitate shipments to China. Following the indictment, Liaw stepped down from his role, and the company has publicly stated its commitment to full cooperation with federal investigators. Notably, CEO Charles Liang and Super Micro itself were not charged in the case. On March 26, Liang issued a statement highlighting newly implemented oversight protocols and the installation of an interim chief compliance officer.
However, investors responded with skepticism rather than confidence. Just last week, Tortoise Capital completely liquidated its SMCI stake from the Tortoise AI Infrastructure ETF. “The indictment was basically the driving factor behind us getting out,” explained Rob Thummel, the fund’s senior portfolio manager.
Zacks Investment Management, which had already liquidated its position during 2025, took an even harsher stance. “In our view this is an uninvestable stock,” declared chief market strategist Brian Mulberry. “Especially since the C-suite is involved, we would sit this out for the foreseeable future.”
History Repeating Itself
This latest controversy isn’t Super Micro‘s first brush with regulatory and compliance troubles. Back in 2019, the company missed critical filing deadlines, resulting in a Nasdaq delisting. It managed to regain its listing in 2020. Fast forward to 2025, and the company once again scrambled to submit overdue financial statements to prevent another delisting and preserve its S&P 500 membership.
The stock experienced an extraordinary rally throughout 2023 and into early 2024, riding the wave of explosive AI infrastructure spending. Shares reached an all-time peak of $118.81 in March 2024. However, since touching $60.71 on July 30, 2024, the stock has shed roughly 65% of its value — ranking as the second-worst performer within the S&P 500 index during that timeframe.
Wall Street’s enthusiasm has cooled considerably. When 2026 began, 10 out of 23 tracked analysts maintained buy recommendations. That figure has since contracted to just six, while sell ratings have increased from three to five. The prevailing consensus now sits at Hold, with analysts projecting an average price target of $31.70 — suggesting potential upside of approximately 47% from present trading levels.
Contrarian Voices Remain
Despite the negative headlines, not every institutional investor has abandoned ship. Gabelli Funds continues to maintain SMCI within its Gabelli Global Technology Leaders ETF. Portfolio manager Hendi Susanto emphasizes the company’s status among the elite group of major AI server manufacturers and highlights its attractive forward earnings multiple of just over 7x — substantially lower than its 10-year historical average of 12x and the S&P 500’s approximately 19x valuation.
Louis Navellier of Navellier & Associates, a longtime shareholder, actually views Liaw’s exit favorably. “The fact that he’s gone I think helps, and they’re apparently cooperating with the DOJ, which is great,” he commented.
Analysts project Super Micro will deliver more than $40 billion in fiscal 2026 revenue, representing an impressive 87% increase versus the previous fiscal year. Bloomberg Intelligence analyst Woo Jin Ho acknowledged that while immediate sales performance appears relatively stable, the indictment “could drive customers to seek more supplier diversity, pressuring 2027 revenue.”
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